BHP Billiton backflips on London stock exchange listing

Tess Ingram

BHP Billiton has made a sharp u-turn on its initial decision to snub a London listing for its $US15 billion ($17 billion) spinoff due to an outcry from European investors and the potential of forced selling.

BHP confirmed that the as-yet-unnamed new company will have a standard listing on the London Stock Exchange as well as proposed primary listing on the Australian Securities Exchange and secondary inward listing on the Johannesburg Stock Exchange.

Fairfax Media has previously reported BHP was open to a London listing if the backlash from British investors was strong enough.

Fund managers with European-only mandates would have been forced to sell shares in the spinoff company if it didn't have a London listing. Barclays Capital estimated in August that 42 per cent of London shareholders – 17 per cent of total shareholders – could be forced sellers in this case, a high enough percentage to cause NewCo shares to fall when it lists.

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But that could be partially offset by up to 5 per cent of indexation demand in Australia and South Africa, Barclays said.

Mr Mackenzie said the company continues to work towards completion of the demerger in the first half of the 2015 calendar year, subject to receipt of the necessary approvals.

A target listing date had been set for mid-next year, subject to a shareholder vote, but it is unclear whether this target will be altered by the additional listing. Both sets of BHP shareholders, in Australia and London, will be required to vote on the demerger before June.

The new group, dubbed "NewCo" will be based in Perth and is headlined by BHP's metallurgical coal business in Illawarra, and the Cannington lead-silver mine in Queensland.

The line-up also includes energy, coal and aluminium assets in South Africa, and bauxite, manganese and alumina in Australia as well as the Cerro Matoso nickel asset in Colombia.